Chapter 656: Monetary Hegemony – The New Pluralistic Standard

  Chapter 642 Monetary Hegemony – The New Duplex Standard

“Welcome to Austrian Economy Online, I’m your host Boni.

Today we’re here to talk about one of the most important topics on everyone’s mind – gold.

We all know that gold is wealth, and our daily use of the SHIELD is issued on the basis of gold as a standard. It can be said that gold and our lives have been closely related, no one can not leave it.

In the recent month, Vienna gold trading market, gold prices rose seven percent, hitting a new high in the last two years.

Now linking economist Prof. Brigitte Fuchs, for us to interpret the impact of the rising gold price.”

“Ticktock ……”

HOST: “Hello Professor Brigitte Fuchs, can you hear me?”

……

Brigitte Foss: “Can you hear me.”

Host: “Prof. Brigitte Foss, there has been a lot of concern about the recent rise in the price of gold.

Are you able to talk about the impact that rising gold prices are having on the world economy?”

Brigitte Fuchs: “Yes, moderator.”

“We all know that gold is a rare metal that usually exists directly as a currency, or a principal, and the price has been stable, if volatile at all.

The recent seven percent increase in the price of gold in the last month can be considered both unexpected and unanticipated.

People may say that my statement is self-contradictory and not logical at all, but in fact it is not contradictory at all.

In the unexpected, that is gold as a currency, the existence of the standard, its own value is unchanged, under normal circumstances, even if there are fluctuations, it is impossible to rise so much.

But gold, in addition to being money, itself is also a commodity. Since it is a commodity, the price is determined by the market, there is a short-term rise is also a normal phenomenon.”

“Putting aside the aura of being a currency, let’s dissect gold as a commodity individually, the reason for the price rise will be clear to everyone.

Vienna gold trading market, gold price rise is not an isolated case. Almost at the same time, the London gold trading market, the price of gold is also rising year-on-year.

The direct cause of this increase in gold prices is two months ago, South African mining group, the British Dawes Gold Mining Group …… and more than a dozen other gold mining giants at the same time announced equipment maintenance, cut gold production capacity.

This decision directly led to the global gold market last month, the number of circulating gold reduced by 20 tons, the market demand exceeds supply prices naturally go up.

Equipment maintenance is temporary, gold mining giants are also to make money, it won’t be long before production capacity will be restored.

But the gold price can immediately return to normal levels, this may not be. With the development of the times, the gold standard has become the mainstream of the times.

In recent years, the world’s economy has been developing rapidly, and the demand for money has been increasing day by day.

The demand for gold as the gold standard is also increasing day by day. However, the amount of gold mining has not increased at the same time.

In order to meet the demand for currency in the market, countries continue to amplify the leverage, nominally and gold exchange ratio has not changed, but in essence the risk of issuing more money has appeared.

This time the gold and multi-country currency exchange price rise, there are factors in this regard, the principal is the countries issued more money, brought about by inflation.

In this regard, we do not need to worry, the exchange value of the shield and gold remains stable.

Here I suggest that if there is not an urgent need, it is best not to hold a large amount of foreign exchange.

Because who knows, it is not possible when the money in your hand becomes waste paper.

From the current situation, Europe has already had a number of national currencies have undergone substantial devaluation. If the governments of these countries do not stop their indiscriminate currency issuance, sooner or later it will lead to disaster.”

Moderator: “Prof. Brigitte Fuchs, just now you mentioned the insufficient amount of gold reserves in certain countries, which leads to inflation.

How should these countries, then, respond to this crisis?”

Brigitte Fuchs: “The simplest way is to adopt the neo-plural standard.

Don’t get me wrong, this neo-complex standard that I’m proposing is not the traditional gold and silver compound standard system, but rather the adoption of a more advanced secondary standard.

For most countries, gold is not something that can be put together overnight. And everyone wants to maintain the gold standard system, so what should they do?

After some research, I found that the adoption of the New Compound Standard would be a perfect solution to this problem.

Simply put, it is the use of credit reliable international currency instead of gold, acting as the standard gold issue currency.

This is equivalent to using a gold, acted as two times the standard gold, issued two copies of the currency, and can guarantee normal payment. This secondary standard method, I call it: the new compound standard method.”

……

I don’t know when Franz also got into the habit of listening to the radio, even though he knew full well that it was bragging.

The so-called rise in the price of gold was actually a blocking war against other countries’ currencies by the two gold-producing countries, Britain and Austria, who artificially manipulated the price of gold.

The so-called gold production capacity, which is still not the gold mining countries say?

In order to increase the competitiveness of their own currencies, Britain and Austria have been controlling the export of gold, artificially creating problems for competitors.

This is for the gold standard countries, there is not enough gold reserves, it will be fatal.

The demand for currency in the market will not be reduced because of insufficient gold reserves, so we have no choice but to increase the leverage of currency issuance.

This is what Britain and Austria want to see, the higher the leverage, the greater the risk. In the period of good economic development can not see, once encountered a change of events said the collapse on the collapse, completely without risk resistance.

Britain and Austria in order to fight for currency hegemony is very fierce, but also does not prevent the two countries to join forces, common control of gold pricing power, first to combat other competitors.

It can be said from the beginning, the gold standard is the British to the world countries set up a huge pit. This huge pit is still a Yang conspiracy, even if you know the risk, we also have to jump in.

In any case, gold is still relatively stable. Even if it is artificially manipulated, it is impossible to play too high! If you play too much, the same will also affect the interests of the British and Austrian countries themselves.

Not no country want to get rid of this huge pit, just finally failed. Facts have proved that the countries that play with the silver standard, and finally be pitched more miserable.

Into the middle and late 19th century, silver has been in a state of devaluation, this fluctuation can be much larger than gold.

Britain and Austria are gold standard countries, in order to stabilize the price of gold for their own interests, the so-called market fluctuations, that is only for other national currencies set up barriers.

This range is usually only a few points, and will not continue. Usually after a few months, the market will return to normal.

Simply put, as long as governments are eating gold, the price of gold will immediately rise. When everyone stops eating gold, much of the market will return to normal.

This rise is still targeted, if you take the pound, or the shield to acquire, there is no such problem.

Want to import gold tariffs or less, if you directly hold the Guilders, pounds as native gold, the same can also achieve the purpose, but also save the purchase of gold tariffs.

Essentially, this is a means of promoting monetary hegemony, only a little more subtle.

……

After listening to a segment of the broadcast, Franz hung up, “Frederick, go and ask how far the radio development has progressed, this kind of interesting news should be shared with the world.”

Until the radio was worked out, there was naturally nothing to talk about in terms of wireless broadcasting. Now Franz listened to cable radio, a technology that accompanied the birth of the telephone.

Simply put, it’s a number of telephone wires connected in series to receive the same source of information.

This kind of high technology was naturally not something that the general public could enjoy. In order to listen to the radio, you need at least a telephone, as well as to pay a high broadcasting fee.

Currently, there are less than twenty cities in the world that have broadcasting, and there are even less than 50,000 broadcasting users.

Austria was at the forefront of the industrial revolution and broadcasting started relatively early. At present, Vienna has more than 5,000 subscribers, and is the city with the highest broadcasting coverage in the world.

This number is already close to the limit. If we want to increase the broadcasting coverage, unless wireless broadcasting is born.

With a limited number of listeners, it’s impossible to have a wide variety of programs. In addition to news, there were only reviews of popular current events, and occasionally a few songs and jokes, which were considered entertainment programs.

The only good thing is that there are no advertisements, not that broadcasters don’t want to charge for advertisements, but mainly because there are too few subscribers to collect a few dollars.

Moreover, now the customers of the service are high-end users, there is no money short of the main, everyone wants high-end service.

Frederick shrugged his shoulders and replied: ”No need father, I just went to see it yesterday. The current progress is very slow, the propagation distance is still stuck at one thousand two hundred yards (about 1097 meters), and there can’t be any obstacles in between.”

There was nothing to be done, who made Franz’s memory bad? The principles of radio had long been forgotten, and now it was up to the scientists to take liberties.

“Twelve hundred yards,” this figure is far from Franz’s heart expectations. Do not talk about wireless telegraphy, even as a walkie-talkie is a little difficult to use.

Franz sighed: “Forget it then, let them experiment slowly! This thing of scientific research all depends on luck, it’s useless to rush.”

These words were spoken to Frederick, and likewise to himself.

(End of chapter)